Running a business based on renewable energy seems to be a family speciality as Chalasani's father was among the pioneers of agro-based paper (rice husk, bagasse, etc) manufacturing industry.

A mechanical engineer from the US, Chalasani returned to India in 1997 to join his father's business. He says while working in the business, he began to look at setting up a unit with backward linkages complete with a sugar mill whose bagasse would be used to manufacture paper. He says that though the integrated unit never became a reality, his research on ethanol drove him into bio diesel manufacture, a concept that was then beginning to take shape.

A year's research with visits to bio diesel manufacturing units in Europe, US and UK meeting leading technology leaders in the bio diesel space led to a tie up with Energea GMBH, a prominent Austria-based bio diesel manufacturing company. Energea, the technology provider, would work on turnkey basis on the project and also operate the plant for two years.

According to Chalasani, in India the technology for setting up a bio diesel manufacturing unit on an industrial scale is not available though a number of state governments are making a lot of claims about manufacturing the product here. In late 2003 he says he approached financial institutions for the funding the project. A consortium of financial institutions led by IDBI are now funding the Rs135 crore-project for setting up an integrated plant manufacturing phytochemicals, nutraceuticals, pharma grade glycerine and bio diesel.

At present 60 per cent of the revenue comes from the other products and the rest from bio diesel. In volumes however, bio diesel comprises 75 per cent of the products manufactured. The plant will have the capacity to manufacture 300 tonnes of bio diesel per day (tpd).

A majority, 52 per cent of the equity in the company is shared equally between Energea and Naturol Bioenergy, a small part is with FE Clean Energy while the rest is held by financial institutions.

The project is scheduled to attain financial closure by October this year. According to him the only constraint in the manufacture of bio diesel is availability of raw material. "If that is assured, the sky is the limit," he says.

He says with the initiatives being taken by a number of governments in India, the scenario is looking more optimistic than before. He says when he first approached bankers for funds, a banker asked him, "Is this the same fuel made by a Mr Pillai in Chennai some years ago?"

He adds, that with DaimlerChrysler India getting a $3 million grant from DaimlerChrysler AG last year to take the Mercedes Benz on an all India run, the level of awareness of the product is better than ever before and adds optimistically, "which is good for us."